Essay, Research Paper: Advertising Business

The Internet is the name for a group of worldwide information resources. These resources are so vast as to be well beyond the comprehension of a single human being. The increasing popularity of the Internet as a business tool can be attributed to current size and projected growth, as well as its attractive demographics. The potential of the Internet to provide an efficient channel for advertising and marketing efforts is overwhelming, and yet no one is really sure of how to best utilize the Internet for these purposes. It is clear that the costs, strategies and effectiveness of Internet marketing differ greatly from conventional marketing. What is the Internet-- what we call the Internet today has its roots in a network set up by the United States Department of Defense in the early 1970's. This network was established by the Advanced Research Project Agency. ARPAnet was connected to various military and research sites and was itself a research project into how to build reliable networks. In particular, research about how to build networks that could withstand partial outages, such as bombings, and still function was important. The theory was to create a system that required a minimum of information from computer clients, and allowed dissimilar computer systems to communicate with one another. This eliminated the need for computer users to carry magnetic tapes and insert them in order to transfer data from one computer to another. Now the computer could put its data into an envelope and address it to send a message on the network. The philosophy was that every computer on the network could talk with any other computer. These methods were so successful, that many of today=s networks adopted these standards. Although there has been much controversy surrounding the use of the Internet as an advertising medium, advertising agencies have not stopped talking about it until 1992, when the Web became user-friendly, Bob Metcalfe of Infoworld magazine said, APaid advertising, mostly as we=ve come to know and love it since the early settlement of Madison Avenue, can save the Internet.@ Although this view is a bit extreme, Metcalfe has some validity to his point. Paid advertising may make the Internet sustainably inexpensive, like television, newspapers, and other traditional media. Advertising on the Internet may also provide practical incentives for attracting the attention of Internet citizens to the information they need. Metcalfe expands this argument by indicating that the Internet is growing rapidly (Metcalfe, 1995). If indeed advertising can save the Internet, as Metcalfe argues, where is Madison Avenue in all of this? Slowly, advertising agencies are becoming aware of the Internet as a marketing vehicle. Yet the $138 billion advertising industry seems unprepared for what lies ahead. The ad business is still recovering from the severe recessions of the late eighties, and layoffs and cutbacks have left advertising agencies without the resources to invest in interactive technologies. A few of the bigger agencies are formally and actively looking into interactive media. But most efforts are small scale and highly theoretical, according to a recent Wall Street Journal article (Smith and King 1995). Interestingly enough, coming late into the information superhighway could be especially dangerous for advertising agencies, which have traditionally held strong stances among the media. Martin Nisenholtz, senior vice president and director of electronic marketing at Ogilvy and Mather is quoted as saying that ad agencies Aare going to get killed if they don=t wake up soon. It=s the largest single case of denial I have ever seen@ (Smith and King). It seems that many of the agencies are signing up with online services such as prodigy and America Online, yet fewer are willing to establish an Internet presence. Those that are on the Internet, such as Poppe Tyson, are starting to realize that more consumers are getting their information from the Internet. AWe want to put on our clients on it,@ says Walt Guarino, general manager of Poppe Tyson. AAnd if we=re not in it, we look dumb@ (Goldman 1994). Commercial businesses are the fastest-growing segment of the Internet because it provides a space in which you can gather information, communicate, and actually transact business. As businesses use the Internet more, and the Internet users become more accustomed to marketing activities, Internet marketing is becoming more and more popular. Marketing on the Internet involves both research and an active outflow of information. Marketing research is common on the Internet, where attitudes are tested, conversations actively pursued, and opinions solicited from many groups. Marketing plans are increasingly counting on Internet access for success. One of the prime uses of the Internet is in the area of customer support. Customers can reach a company on their own schedules, day or night, and obtain information. The customer support information only has to be transferred to an archive once, and yet it may be accessed by thousands of customers and potential customers. This is indeed a labor-efficient and cost effective method of distributing information. In addition, a business with a presence on the Internet is perceived as modern, advanced, and sophisticated. In these days of a highly-competitive global marketplace, the company that can reach and satisfy customers will have an advantage; and the Internet can help in maintaining relationships with customers. The Internet is also a fast and efficient way of networking with vendors and suppliers. With its global reach, the Internet can assist businesses in locating new suppliers and keeping in better touch with them to aid, for example, zero inventory planning. A business might